Decoding the importance of cloud computing and collapsing layers in the network to make for simpler, less expensive networks were two dominant themes at the Service Provider Summit located on the OFCNFOEC 2012 show floor this morning.

Cloud computing is essential to handling peak loads of traffic, according to Verizon’s Stu Elby, who provided the keynote address. Examples Stu provided included traffic the Internal Revenue Service has to handle up to April 15 and university registration in the days leading up to the fall and spring semesters.

Cloud computing is split between the enterprise and consumer markets, said Elby, each of which has its own distinct characteristics.

“When we think of the cloud, it makes the devices we buy more valuable,” Stu told the well attended summit. “The device’s ability is what is happening in the cloud.” Added Elby: “All the devices I have mentioned lead to social networking, which is considered a cloud service.”

“Verizon is focused largely on the enterprise side,” said Stu. “Cloud is really all about connected data centers. A data center has to be directly connected to the network. A tight synergy between the two is important.”

Stu also addressed the ‘layer of orchestration” which involves such things as how to move more machines to a certain layer.

“What we are on the cusp of is a network of services into the cloud,” Elby observed.

“Cloud computing infrastructure itself has changed dramatically in the past three years,” he notes. “We can do real time packet processing on computers, it doesn’t have to be on ASICs any more.”

Service presence in cloud computing is critical, Stu said. “IP and optical are global, not tied to some service-only format located in North America or Latin America.” Adds Stu: “Instead of having a complex failure, we have the tools available to us in data centers”

“Cloud computing technologies are revolutionizing how networking and network services are provided,” Stu concluded. “Cloud data center services will be a high growth area for our industry, cloud computing technology has evolved to support real time communications services.”

Bob Feuerstein of BT Innovation and Design observed that BT is going to greatly be increasing its broadband reach, noting that this year alone it intends to pass two thirds of the residences in the United Kingdom with fiber.

“We are looking for an incredible increase in demand and are under constant pressure to provide the services and under constant pricing pressure,” said Feuerstein.

One way of possibly reducing this pressure is to make the BT network more simple. The existing BT network is a multiple layer service that includes PDH, SDH and WDM, he notes.

“We have to make the network simpler to maintain our competitiveness in the world,” says Bob. Open flow networking could “help ease the pain,” he says. “All of our services are moving to IP, packet-based services. The future vision is that everything is going over IP,” adds Bob.

“We are going to reduce equipment diversity,” says Feuerstein. “We really need new more compelling devices to move into new domains.”

One area of potential synergy that also has been mentioned in other OFC sessions is combining the WDM and router functions. “We can stick WDM optics straight into the router and use a number of transponders,” says Bob. “We are going to keep pressing the router vendors.” Such consolidation also may be attractive to WDM vendors, which could add IP router capabilities to their equipment.

“Converging the network layers is going to happen,” says Bob. “There is going to be hardware savings, NMS savings and reduced upgrade costs. This is all moving us to the converged network.” Adds Feuerstein: “Convergence is the right answer and it will come to pass, the only question is when it will come to pass.”

Frank Ruhl from Australia’s Telstra picked up the convergence theme. “There will be opportunities as we collapse layers one through three,” he said. “Reducing the number of interfaces will reduce costs.”

Ruhl also spoke up in favor of optical burst technology. “Bursts could be allocated as timeslots like GPON or as asynchronous packet bursts,” he reasons.